Report: NDP victory could sink B.C.’s credit rating

VICTORIA – The country’s largest credit agency has confirmed British Columbia’s credit rating at AA high, but the bond rating agency cautions the upcoming provincial election could mean a change in fiscal direction.

But DBRS said that it was considering recent opinion polls that suggest the New Democrats have the best chance of forming the next government.

“While (the agency) is encouraged by the responsive measures taken in the February budget to restore fiscal balance,” the statement said, “the upcoming provincial election … has the potential to delay or cancel the implementation of some of the … budgetary measures.

“(The agency) believes this could result in a change in fiscal direction,” said the report.

B.C. Finance Minister Mike de Jong called the report a vote of confidence for the Liberal government over its handling of provincial finances.

He said he thought the report was a warning that the NDP could change the province’s fortunes.

“They’re watching, and the point here is they’re concerned about the uncertainty, the very real possibility that an NDP government would go in a significantly different direction,” he said in an interview

“You get a clear sense from the Dominion Bond Rating Service that they have a strong suspicion that it does not include the kind of fiscal discipline that has been the hallmark of our government.”

NDP finance critic Bruce Ralston said he didn’t believe the agency was sounding any kind of alarm, rather, that the analysis was business as usual.

Asked what kind of fiscal change could be expected if the New Democrat were to form government, he said they might be “more prudent” than the Liberals.

“I’m sure (the agency) will be equally satisfied with the fiscal measures we’ll take,” he said in an interview.

The Liberals’ pre-election budget offered few goodies to voters, though it does balance the province’s books by 2013-2014.

De Jong was reviewing the rating report from Ontario, where he recently met with that province’s new finance minister, Charles Sousa.

“They’d love to have our credit rating,” he said.

De Jong said that he and the minister discussed trying to bring some uniformity to question of tax credits and subsidies for the film sector, which has sparked anger from those in the industry based in B.C. Its advocates complain Vancouver is losing business to eastern provinces, which offer richer tax breaks.

“Let’s find a way to bring some consistency to this,” he said.

The DBRS report said the fiscal progress of the province, along with its relatively low debt burden, will allow it to withstand further economic turbulence.

The agency will provide a report with further analysis on the province’s finances following a new budget, which is expected to be presented in the summer or early fall.

In December, Moody’s Investors Service revised its outlook on B.C.’s AAA rating from stable to negative.